Encyclopedia

PEOPLE: FRED BUSHELL

Name: Fred Bushell
Nationality: Great Britain

Fred Bushell trained as a chartered accountant and worked in the City of London in the early 1950s, often passing the Railway Hotel on Hornsey High Street on his way home. Behind the pub were the workshops of the Lotus Engineering Company, which had been set up a couple of years earlier. Bushell noticed the unusual cars being created there are one day met the man behind them, Colin Chapman. When it emerged that Bushell was a chartered accountant, Chapman took him on to sort out the finances of the business which was at that stage building customer versions of the Lotus 6 racing sports car. In the years that followed Bushell pushed Chapman to move into road car production with the Lotus 7, moving the firm from Hornsey to Cheshunt in 1959 in order to build the first Lotus Elites, which were much more profitable than the Lotus 7 kit cars. This helped to fund the company's Formula 1 team, which began racing in 1958. The move to the Lotus Europa in 1966 meant that the company needed to move again and ended up in Hethel, near Norwich. The success in F1 with Jim Clark from 1963 onwards pushed the firm forwards into luxury car production but the costs forced Chapman and Bushell to look for new sources of funding and in 1968 they introduced commercial sponsorship in F1 with a deal to run its cars in Imperial Tobacco's Gold Leaf livery. In 1973 they sold the design of the Lotus 7 to Caterham Cars, which continues to produce the cars to this day. There was further success in F1 with World Championships for Graham Hill (1968), Jochen Rindt (1970) and Emerson Fittipaldi (1972) but things became more difficult in the 1970s with the rise of McLaren and the revival of Ferrari fortunes. Team Lotus continued to lead with innovation, notably ground-effect aerodynamics which resulted in Mario Andretti's World Championship in 1978. That same year the two men did a deal to design a car for American John De Lorean, who was funded with government subsidies as he built a factory in troubled Belfast. The government agreed to pay Lotus $18m but this money went to a Geneva-based, Panama-registered company called General Product Development Services Inc which had been set up to avoid tax. This money disappeared without trace. DeLorean is alleged to have taken around half, while Chapman took 45% and Bushell just 5%. The De Lorean Motor Company went bankrupt in late 1982 and the Serious Fraud Office was soon investigating the affairs of the firm and discovered the role played by Lotus. Chapman died suddenly in December that year but Bushell took over as chairman and avoided a collapsed early in 1983 when a loan had to be repaid. Bushell raised the money needed, supported by British Car Auctions (BAC) and Toyota. He stood down as chairman in October 1983 to allow BAC boss David Wickins to take over but he remained in charge of Team Lotus until July 1989 when he was arrested. Bushell knew exactly where all the money had gone but refused to say anything and in 1992 pleaded guilty to conspiring to defraud the DeLorean Motor Company. He was sentenced to three years in jail, fined £1.5m and ordered to pay costs of more than £800,000 but as he could not pay the fine he spent an extra year in jail. When he came out of prison he became a director of the Chapman Family's Classic Team Lotus organization.